SME intervention programs at risk

By MATTHEW VARI

Sunday, August 9, 2015 (Sunday Chronicle, PNG)

WITH the passing of the SME Policy in March this year along with the creation of the SME Corporation, the government has even publicized ambitious plans to have close to 500,000 new SMEs created by 2030- these plans however may be far from reached if current efforts to boost the sector are hampered by huge shortfalls in funding to implementing agents like the National Development Bank (NDB).

Key programs established for the SME Stimulus Package in line with the SME Policy as part of the government’s development priorities for 2013 to 2017, NDB was tasked to deliver three key projects with adequate funding that was supposed to come from the government.

Projects included lending at 6.5% to empower the growth of the SME Sector, to roll out the Stret Pasin Incubation Business program, and to roll out the People’s Micro Bank operations throughout the country.

“Unfortunately due to the lack of funding to the national development bank it has hampered the rolling out of these very important intervention projects in terms of assisting our small people to do business,” NDB Managing Director Moses Liu said.

“The national government should roll out adequate funding for the implementation of the recently legislated SME policy for it to be a success; otherwise we will not achieve the desired outcomes.”

“We believe we are in a position to do that. We do have the capacity and network to do that but we strongly believe that without the government’s support we will not be able to provide the services that we have been tasked to give.”

Liu reiterated that the current financial woes will have a detrimental effect, however, added that 2015 NDB we are focused on rolling out 10 Pasin Stret stores.

He added that for this year it will not affect them for the pilot phase- next year we are supposed roll out this project in a big way at least two shops per program. If the government does not address this current situation we will not be able to do that.

“So far we have supported the pilot project (Stret Pasin Scheme) through our internal cash flow as it is a national project.”

“We are continuously having the situation now where our clients are frustrated, continually complaining that it is taking forever for loans to be approved. What we try to do is as much as possible spread the loans to a lot of our over 400 rural customers.”

“We are trying to balance our funding from a cross-section of our customer base. We are in 21 provinces and it is a big task by the government for us to basically manage these provinces.”

“So far several of our customers have left us on occasions because we couldn’t fund quickly and also obviously the disappointments are there on a daily basis,” Liu concluded.